Microsoft Asks, Why Buy Yahoo?

Published: May 24, 2007

Microsoft said Wednesday that it did not need to buy Yahoo to gain scale in online advertising, because it had ''all the pieces'' to build a successful ad business.

Speaking at the Goldman Sachs Internet Conference in Las Vegas, Microsoft's chief advertising strategist, Yusuf Mehdi, said that the company was already bigger than Yahoo in terms of users of its Web services like e-mail and instant messaging.

Last week, Microsoft said that it would acquire aQuantive for $6 billion to gain a foothold in the online advertising business dominated by its rivals Google and Yahoo.

Still, some analysts said Microsoft needed an established Internet player like Yahoo to gain scale to take on Google. Several newspapers reported this month that Microsoft was considering a deal to acquire Yahoo for $40 billion to $50 billion.